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Buying On Time

This article was edited and reviewed by FindLaw Attorney Writers | Last reviewed March 26, 2008

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What These Words Mean

Interest - Money paid for the use or borrowing of money
Merchandise - To buy or sell things
Transaction - A business deal
Repossess - To take something back when payments are not made

What is Buying on Time?

Payments are spread over a period of months or years.

What Kinds of Things are Usually Bought on Time?

  • Automobiles
  • Refrigerators/freezers
  • Stoves
  • Furniture
  • Jewelry

What is a Time Sales Contract?

An agreement to pay weekly, every two weeks, or monthly, at a price more than would be paid if cash were used. The seller must tell the buyer:

  • the cash sale price
  • down payment (cash or trade-in)
  • the amount financed
  • number of payments
  • yearly interest rate

What is Credit Insurance?

Item will be paid in full if buyer should die or become ill.

Why Should You Carefully Read a Contract Before Signing?

  • Papers signed are legal
  • You must make payments at certain times
  • Seller has the right to take back merchandise if agreement is not kept
  • Get advice about things you do not understand in the contract

When Can Your Time Sales Contract be Sold?

Once the deal is completed, the seller may sell your contract to a bank or loan company.

The new bank or loan company then collects from you.

What Should You Know About Interest Rates?

Ask to see the Missouri law which explains the amount of interest that can be charged.

Interest rates can be as much as 21 1/2%.

General Practice

The buyer may pay off the loan at any time.

What is "90 Days Same as Cash" Time Sales?

Interest-free loans must be paid in full by the end of 90 days.

What is Expected of the Buyer?

  • Pay on time and at a certain place.
  • Pay a fee for late payments.
  • Continuous late payments may mean a lawsuit or that seller may repossess the merchandise.

What are the Duties of the Seller if the Buyer Does Not Pay?

  • Notify in writing what is to happen
  • The buyer must be given a certain time to catch up on payments.
  • Two such notices are required on the same contract.

Can Your Wages be Tied Up?

Yes, if the seller sues and wins.

What is Meant by Co-Signer?

Someone else signs the sales contract with you, and is responsible for payments.

What are Some Things to Remember Before Buying on Time?

  • Understand your contract fully.
  • Read every paper carefully before signing.
  • Co-signer is responsible for full payment of the debt.
  • A buyer must be given notice and time to make up missed payments.
  • If a seller takes back merchandise, he may sue for more than the loan.
  • Decide whether it is cheaper to buy on time or pay cash.
  • You are to make payments on time. If you have a good reason for being late, discuss your problem with the seller. It may be possible to work out a plan for paying.

For Legal Advice, See Your Lawyer

If you need help finding a lawyer call The Missouri Bar Lawyer Referral Service at 573/636-3635.

In St. Louis, call
314/621-6681
In Kansas City, call
816/221-9472
In Greene County, call
417/831-2783

The Missouri Bar, P.O. Box 119, Jefferson City, MO 65102-0119
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